Peter Chernin, News Corp.'s president and chief operating officer, will stay put at the media giant controlled by Rupert Murdoch, ending speculation -- at least for now -- that he might jump to a rival such as Walt Disney Co.
News Corp. announced Thursday that Chernin had signed a new employment contract, effective Sunday, that will keep him running the company for an additional five years.
The contract negotiations, which have dragged on for months, have been the subject of speculation in the press because the 53-year-old media executive was seen as a top contender to succeed Michael Eisner as Disney's chief executive.
Eisner's future was called into question earlier this year in part because of the company's prolonged stock slump, an unsolicited -- and ultimately unsuccessful -- takeover bid from Comcast Corp., and a shareholder revolt that cost Eisner his job as Disney chairman.
Now that Disney's outlook has strengthened in recent months and Eisner's position has grown more secure, Murdoch figured the time was right to renew Chernin's contract, which was to have expired in November.
Though many top executives have provisions in their contract preventing them from joining the ranks of a rival, Chernin had an unusual clause in the earlier contract that allowed him to leave News Corp. to become head of another media giant.
The provision was a deal sweetener designed to give him a shot at a job he will never have at News Corp., where the 73-year-old Murdoch is CEO and plans to hand the reins eventually to his own heirs, who have top posts at the company.
The new contract was not made public, and News Corp. declined to elaborate on its terms or whether it also contained such an out. Chernin did not return phone calls Thursday seeking his comment. News Corp. sources, however, said Chernin's new contract also would allow him to leave for a better job.
Chernin has been the highest compensated News Corp. executive, making even more than Murdoch, according to Richard Greenfield, an analyst at Fulcrum Global Partners.
Chernin made $17.3 million in 2002 and $17.9 million in 2001, he said, compared with Murdoch's compensation of $14.1 million in 2002 and $9.2 million in 2001.
Greenfield estimates that Chernin's new compensation exceeds $20 million a year.
Chernin joined News Corp. in 1989 as president of entertainment at the Fox broadcast TV network and later ran the company's movie business, supervising the release of hit films such as "Titanic."
Since becoming president and chief operating officer of News Corp. in 1996, he has brought stability to management and consistency to the company's financial performance, industry observers say.